Doug Lung /
12.22.2010 12:45 PM
FLO Spectrum Sale Hints at UHF Spectrum Value

One of the precepts of the FCC's plan to reallocate up to half the usable broadcast TV spectrum for broadband is that the market value of the spectrum would be much greater if it's used for broadband rather than for broadcasting.

If the price AT&T is paying for Qualcomm's prime FLO spectrum is any indication, the FCC may have a hard time convincing broadcasters to voluntarily give up their spectrum.

AT&T is set to pay $1.925 billion for spectrum currently used for Qualcomm's FLO TV operation. While that may sound like a large amount, consider that, according to the TWICE article on the shutdown, FLO was operational in 107 markets. Dividing 107 into $1.925 billion gives an average price per market of only $18 million. The price per channel would be less, as Qualcomm also owns Block E spectrum in some markets.

How many TV stations would be willing to give up their TV channel for $18 million? In reality, they would receive much less, as the government would want its cut for deficit reduction.

One possible reason for the lower price is this is "unpaired" spectrum--there isn't a separate block of frequencies to be used for two-way communications.

This doesn't appear to be a problem for AT&T, however. An AT&T and Qualcomm press release announcing the deal said that "AT&T intends to deploy this spectrum as supplemental downlink, using carrier aggregation technology. This technology is designed to deliver substantial capacity gains and is expected to be enabled with the completion of 3GPP Release 10."

It's hard to imagine UHF broadcast spectrum bringing a much greater price. After all, the FLO spectrum is close to frequencies that Verizon is using to build out its LTE network, so equipment will be available. The spectrum doesn't have to be cleared, and there are no adjacent broadcast channels to cause interference.

An article in TWICE on the sale, Qualcomm To Sell FLO TV Spectrum to AT&T states. "Qualcomm also plans to develop LTE multicast technologies specifically to deliver high-bandwidth video and other multimedia content."

LTE multicast sounds a lot like broadcasting to me.

Perhaps broadcasters should stop using the phrase "Mobile DTV," and instead call it "broadband multicasting" or "wireless multicasting" to make it sound more 21st century.



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1.
Posted by: Brian Smith
Thu, 52-23-2010 03:52 PM Report Comment
SpectrumEvolution.org has been making precisely the point that the most efficient use of UHF TV spectrum is for a combination of TV and broadband, and the broadband download function can be implemented almost immediately by broadcasters instead of being delayed for years in a "re-purposing" rule making and auction which might end up being devoid of "volunteers." Moreover participation by broadcasters in this activity will ensure a continuation of diversity rather than the concentration of ownership that will surely result from auctions dominated by the most wealthy companies. If the government is worried about revenue, broadcasters already pay 5% of their ancillary revenue under present rules and can certainly discuss other financial arrangements. So far, the FCC seems afraid that SEO's plan might actually work. The FCC needs to have a more open mind and to "unleash" the free marketplace (to use their own buzz word) to decide the nation's future. Broadcasters need to be more active in pushing the FCC away from its pre-conceived notions about what is good for us notions reinforced, if not created, by the overwhelming lobbying strength of the legacy wireless industry.
2.
Posted by: Brian Smith
Wed, 21-22-2010 02:21 PM Report Comment
The value, as you point out, isn't in the license despite the assertions of broadcasters - it's the content on those carriers. There are many companies/corporations that could buy up swaths of spectrum around the country, but most are not in the entertainment/content-creation business which is what is needed to fill those transmitting pipes (infomercials definitely don't count). Those big companies that have broadcast operations are working hard to capitalize on alternative delivery and retransmission revenue as the broadcast portion continues to tank (despite the political ad bump this past quarter). All of this I'm sure you know. I believe that having un-paired freqs isn't necessarily a bad thing as hybrid RF devices similar to the Kindle and iPad that could use the high bandwidth transmitter for the download portion and a low bitrate cellular component for the ACK path. AT&T probably knows this and it will be interesting to see what devices are forthcoming. Didn't broadcasters recognize that we were becoming "datacasters" as soon as the digital transmitter went on the air? Whoops, sorry. Forgot I was talking about broadcasters here. I know the answer to my question...
3.
Posted by: Anonymous
Tue, 14-18-2014 07:14 AM Report Comment
What an extremely insightful article! Thank you Mr. Lung for truely shedding some light on UHF Spectrum Value. Can't wait for another article as well! Its great.!!! The case studies really offer food for thought and the opportunity to share best practice.




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